ABSTRACT
Concurrent cost management requires stable, cooperative, and mutually beneficial buyer-supplier relations. When the buyer outsources research and development for a major function or group component, concurrent cost management becomes a powerful approach to cost management. The two major approaches to concurrent cost management are parallel and simultaneous engineering. In parallel engineering, the buyer's and supplier's design teams essentially work independently. The main interaction occurs at the very beginning of the product development process. The primary benefit of simultaneous engineering over parallel engineering lies in the ability of the two design teams to work closely together during the product conceptualization phase of product development. The adoption of simultaneous engineering often leads to the adoption of bundled target costing. Under the simultaneous engineering approach, the buyer tells the suppliers the target costs for each of its major functions and then expects the suppliers to find a way to achieve them.
